Head-To-Head Comparison: loanDepot (NYSE:LDI) vs. Kingsway Financial Services (NYSE:KWY)

Kingsway Financial Services (NYSE:KWY) and loanDepot (NYSE:LDI) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, profitability, earnings, dividends, institutional ownership, analyst recommendations and risk.

Volatility & Risk

Kingsway Financial Services has a beta of 0.25, meaning that its stock price is 75% less volatile than the S&P 500. Comparatively, loanDepot has a beta of 3.56, meaning that its stock price is 256% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for Kingsway Financial Services and loanDepot, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kingsway Financial Services	1	0	0	0	1.00
loanDepot	4	1	0	0	1.20

loanDepot has a consensus target price of $1.38, indicating a potential upside of 209.68%. Given loanDepot’s stronger consensus rating and higher probable upside, analysts clearly believe loanDepot is more favorable than Kingsway Financial Services.

Institutional & Insider Ownership

72.4% of Kingsway Financial Services shares are held by institutional investors. Comparatively, 39.4% of loanDepot shares are held by institutional investors. 41.4% of Kingsway Financial Services shares are held by insiders. Comparatively, 65.9% of loanDepot shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Kingsway Financial Services and loanDepot’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kingsway Financial Services	-6.53%	-67.61%	-4.43%
loanDepot	-6.79%	-39.99%	-2.03%

Earnings & Valuation

This table compares Kingsway Financial Services and loanDepot”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kingsway Financial Services	$134.97 million	1.94	-$10.73 million	($0.30)	-30.10
loanDepot	$1.19 billion	0.13	-$62.65 million	($0.36)	-1.23

Kingsway Financial Services has higher earnings, but lower revenue than loanDepot. Kingsway Financial Services is trading at a lower price-to-earnings ratio than loanDepot, indicating that it is currently the more affordable of the two stocks.

Summary

loanDepot beats Kingsway Financial Services on 7 of the 12 factors compared between the two stocks.

About Kingsway Financial Services

Kingsway Financial Services is a holding company that acquires, owns and operates businesses in the insurance and non-insurance sectors. Its operations have included specialty insurance, including coverage for nonstandard automobile risks, as well as businesses providing professional and other services. The company has historical roots in the insurance industry and has evolved into a diversified operator with a focus on building and managing a portfolio of businesses. Its activities have primarily served markets in the United States, while its earlier insurance operations also had a presence in Canada.

About loanDepot

loanDepot, Inc. is a U.S.-based mortgage lender that provides home loans to consumers. Its offerings include mortgages for home purchases and refinancing, delivered through its retail branches and digital channels. The company also works with mortgage brokers and other lending partners and provides mortgage servicing. Its technology platform supports the application and loan-management process. Founded in 2010 by mortgage entrepreneur Anthony Hsieh, loanDepot serves customers across the United States.